meed-logo

line1 line2 line3
SIGN IN / REGISTER

Adnoc awards $1.34bn Estidama project contracts

3 July 2023

 

Register for MEED's guest programme 

Adnoc Gas, the natural gas processing business of Abu Dhabi National Oil Company (Adnoc Group), has awarded contracts for two key packages of its project to upgrade its sales gas pipeline network across the UAE.

The total value of the two engineering, procurement and construction (EPC) contracts for the project, also known as Estidama, is estimated to be $1.34bn, Adnoc Group said in a statement on 3 July.

UK-headquartered Petrofac has been awarded the EPC contract for package 2 of the Estidama project. Package 2 is understood to be worth $720m, sources told MEED.

A consortium of Abu Dhabi’s National Petroleum Construction Company (NPCC) and Lebanon-headquartered CAT Group has won Estidama package 3, which is valued at approximately $630m, according to sources.

The new pipeline will extend Adnoc Gas’ existing 3,200-kilometre pipeline network to over 3,500km, enabling the transportation of higher volumes of natural gas to customers in the Northern Emirates of the UAE.

“This strategic pipeline extension will drive further growth for Adnoc Gas as it continues to supply sustainable gas supplies in the UAE in support of the company’s strategy to increase its market share and enhance its customer base,” Adnoc said in its statement.

Over 70 per cent of the contracts’ value is expected to flow back into the UAE economy under Adnoc Group’s In-Country Value (ICV) localisation scheme, Adnoc added.

Key Estidama packages

Adnoc Gas Processing, now part of Adnoc Gas, initially intended to issue separate EPC tenders for packages 2 and 5. However, it tendered these as a combined job in June last year. Contractors submitted technical bids for these packages in August 2022.

Eventually, Adnoc Gas divided the scope of work on combined packages 2 and 5, MEED reported in February this year.

Following the revision of the scope of work, Estidama package 2 broadly involves building a new facility at the KP-30 location of the Habshan gas compressor plant (HGCP) and installing three variable frequency drive motor-driven compressors.

Adnoc Gas received technical proposals for Estidama package 2 on 24 February. Contractors submitted commercial bids by 27 March.

Along with Petrofac, the following contractors, among others, are understood to have submitted commercial bids for Estidama package 2:

Package 5 is expected to be tendered separately to contractors as part of a planned second phase of the sales gas pipeline upgrade project.

ALSO READ: Gas takes centre stage in Adnoc downstream expansion

Adnoc Gas issued the main tender for Estidama package 3 in late June last year.

Contractors submitted technical bids for the package in August 2022, while commercial bids were submitted by 21 November.

MEED previously reported that Italy-headquartered Arkad was the lowest bidder for package 3, with a quotation of about $590m. A source close to the project said that following months of “intense negotiations, due diligence processes and evaluation of project delivery capabilities”, Adnoc Gas picked the consortium of NPCC and CAT for the package.

The scope of work on package 3 covers the installation of new gas pipelines from the Habshan complex to the HGCP, and from the HGCP to the Sweihan customer receipt, along with associated facilities.

Sales gas pipeline project packages

Erstwhile Adnoc Gas Processing, now consolidated into Adnoc Gas, initially divided the EPC work on its estimated $2bn sales gas pipeline network enhancement project into seven main packages.

China Petroleum Pipeline Engineering performed the Estidama project’s front-end engineering and design works as part of a contract worth about $6m that Adnoc Gas Processing awarded the Chinese state-owned firm in October 2020.

MEED reported in December 2021 that Abu Dhabi-based contractor Integrated Specialised General Contracting Company (Iscco) had won package 1, which is understood to have a contract value of $18m.

Iscco subcontracted the detailed engineering works on package 1 to the Abu Dhabi branch of Sweden-headquartered consultancy Rejlers.

Adnoc Gas issued the main tender for package 6 and packages 3 and 2+5 in late June last year.

Contractors also submitted technical bids for package 6 in August 2022 and commercial bids by 21 November.

Work on package 6 entails the installation of a 52-inch, 74km pipeline from Sweihan to Al-Shuwaib in Abu Dhabi and building two block valve stations.

Adnoc Gas combined the scope of work on packages 4 and 7, and issued the main tender in November last year.

Contractors submitted technical bids for combined package 4+7 by 27 March. The project operator is yet to call for commercial bids for this package.

The main scope of work on the Estidama combined package 4+7 involves laying a new pipeline from the Al-Shuwaib pig launcher and pig receiver station to the Sajaa gas facility in Sharjah.

The scope also covers building a new gas pipeline between BVS-2/KP28.7 in Abu Dhabi to Dubai’s Margham gas facility to meet increased gas demand from Adnoc Gas Processing’s customer Dubai Supply Authority (Dusup).

“Up to a dozen contractors are likely to have submitted technical bids for [combined package] 4+7,” one source said.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10980546/main.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Neom’s industrial pivot gathers pace

    1 October 2026

    Commentary
    Colin Foreman
    Editor

    Reprioritisation has been the buzzword in Saudi Arabia over the past two years and nowhere has that been more evident than at Neom. 

    The slowdown of development at The Line and the postponement of the 2029 Asian Winter Games at Trojena have dominated international headlines. As these projects scale back, Oxagon’s industrial and logistics base has become the $500bn gigaproject’s flagship development. There are tangible results: in August, the $8.5bn Neom Green Hydrogen project was commissioned, marking Neom’s most significant completion to date. 

    Construction activity elsewhere at Oxagon supports this trend. The AI data-centre campus being developed by Humain and DataVolt has broken ground on its first 100MW phase, backed by $5bn of investment and targeted for service in 2028. Neom has issued an expression of interest for a rail line linking the Port of Neom to Saudi Arabia Railways’ North-South network, tenders are out for an industrial wastewater plant and the upgrade of Highway 55, and the port itself is advancing towards a 2030 capacity target of 1.5 million TEUs. 

    The regional conflict that began in February has strengthened the business case by giving Oxagon’s Red Sea port added strategic weight as a second maritime gateway outside the Strait of Hormuz, at a time when Riyadh has committed to directing about 80% of the Public Investment Fund’s portfolio into domestic investment.

    These developments reflect a kingdom recalibrating rather than retreating

    Elsewhere, Saudi Arabia’s wider projects market is holding steady despite conflict-related disruption, with contract awards reaching $68bn so far this year. The regional power market is also diversifying, with Aljomaih, EDF and Kepco all more than tripling net capacity in recent years as Acwa retains its lead.

    These developments reflect a kingdom recalibrating rather than retreating, with priority given to projects capable of delivering commercial returns.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20178338/main.gif
    Colin Foreman
  • Contractor wins Dammam airport water infrastructure deal

    1 October 2026

    Saudi Arabia-based Alkhorayef Water & Power Technologies has won an SR80m ($21.3m) contract to rehabilitate water and wastewater infrastructure at King Fahd International airport in Dammam in the kingdom’s Eastern Province.

    The contract was awarded by Dammam Airports Company (DACO), and work is scheduled to be completed within 18 months, the firm said in a disclosure to the Saudi Exchange (Tadawul) on 29 September.

    The scope covers the design, construction, supply, installation, replacement, rehabilitation and integration of water and wastewater infrastructure.

    It includes pumps, storage tanks and reservoirs, reverse osmosis facilities, piping and tie-ins, as well as electrical and instrumentation works.

    The award comes as DACO advances a wider programme of investment at King Fahd International airport.

    DACO signed more than SR1.2bn ($320m) in agreements in June covering airport infrastructure, including a new power station, a medium-voltage distribution network and upgrades to the existing electrical grid. 

    In September, it also appointed WSP Middle East, the regional arm of Canadian engineering firm WSP, to develop the airport’s expansion under its masterplan.

    The expansion is intended to increase annual passenger capacity to more than 19.3 million by 2030, with a longer-term target of 32 million passengers. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20169118/main.jpg
    Mark Dowdall
  • Kuwait tenders LNG project

    1 October 2026

     

    State-owned Kuwait Integrated Petroleum Industries Company (Kipic) has tendered a project to develop a reliquefaction unit at the Al-Zour liquefied natural gas (LNG) import terminal.

    The project focuses on developing a boil-off gas (BOG) unit at the terminal, with bids due on 22 December.

    A meeting for contractors to discuss the project is scheduled for 18 October.

    The project scope includes engineering, procurement and construction works, along with pre-commissioning, commissioning and performance testing services.

    The list of prequalified companies is:

    • Fluor (US)
    • GS Engineering & Construction (South Korea)
    • Tecnicas Reunidas (Spain)
    • Larsen & Toubro (India)
    • Hyundai Engineering (South Korea)
    • CTCI Corporation (Taiwan)
    • Daewoo Engineering & Construction (South Korea)
    • Hyundai Engineering & Construction (South Korea)
    • Saipem (Italy)
    • Samsung Engineering (South Korea)
    • Sinopec Engineering (China)
    • JGC Holdings (Japan)
    • KBR (US)
    • China National Petroleum Corporation (China)
    • Technip (France)

    A BOG unit at an LNG facility captures, compresses and processes natural gas vapours that evaporate from cryogenic storage tanks, enabling the gas to be recycled back into the system rather than flared.

    In April, MEED revealed that contractors expected the project to be worth about $200m.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20168625/main2005.jpg
    Wil Crisp
  • Riyadh approaches contractors for 2km tower

    1 October 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s Public Investment Fund (PIF) has reached out to contractors as part of a market-sounding exercise for the construction of the proposed 2-kilometre megatall tower project.

    MEED understands that a PIF subsidiary, the Tower District Real Estate Development Company, is undertaking the process.

    It is understood that several experienced international contractors, as well as some prominent local contractors, have been approached.

    The latest development follows PIF receiving offers in June last year from firms seeking a contract to provide project management consultancy (PMC) services for a new central business district (CBD) on the outskirts of Riyadh, which includes the proposed 2km tower.

    The PMC role covers both the tower and the surrounding district.

    Firms understood to have been invited to bid include US-based Aecom, Jacobs, Parsons and Turner, as well as the UK’s Mace.

    UK-based Foster & Partners is working as the architect for the tower after winning a design competition launched in late 2022.

    Record breaker

    The proposed tower would be more than double the height of the world’s tallest building, Dubai’s Burj Khalifa, which stands 828 metres tall. It is expected to be at least several hundred metres taller than the 1,000-metre-plus tower under construction in Jeddah.

    Contractors that have priced megatall towers in the region say a 2km-tall structure could cost about $5bn to construct, depending on the final design.

    The 2km tower and the surrounding CBD – known as Project Rise – sit within a larger masterplanned development to the north of Riyadh called the North Pole.

    MEED’s October 2026 report on Saudi Arabia includes:

    > COMMENT: Saudi projects hold steady
    > GOVERNMENT: Riyadh looks to reset its regional defence outlook
    > ECONOMY: Conflict bolsters case for Saudi economic diversification
    > BANKING: Saudi lenders readjust to lower lending and deposit climate
    > UPSTREAM: Aramco upstream spending gathers pace
    > DOWNSTREAM: Sabic steps up Saudi petchems investment
    > POWER: Saudi Arabia’s power award activity slows
    > WATER: Saudi water sector hits sharp slowdown
    > CONSTRUCTION: Saudi construction defies the headwinds
    > TRANSPORT: Saudi infrastructure pushes forward amid conflict
    > DATABANK: Saudi data indicates project spending shift

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20156496/main.jpg
    Yasir Iqbal
  • Singapore’s Temasek plans Middle East expansion

    1 October 2026

    Singapore’s Temasek plans to open offices in Riyadh and Abu Dhabi early next year as it targets investment and partnership opportunities in Saudi Arabia, the UAE, Qatar and the wider region.

    The state-owned investor had a net portfolio value of S$518bn ($401bn) as of 31 March 2026.

    It said the new offices will serve as regional hubs for Temasek and its portfolio companies, with some businesses expected to co-locate to work more closely with partners and pursue deals alongside the group. The openings are subject to regulatory approvals.

    Temasek said it will also step up engagement with institutions in Qatar, although it has not announced plans to establish an office there.

    The company said the expansion reflects its confidence in the region’s long-term fundamentals and the economic transformation being driven by national diversification programmes.

    It added that a presence in Riyadh and Abu Dhabi will also support investment activity beyond the region by improving access to opportunities across the wider Middle East, Central Asia and Africa.

    Several Temasek-owned or Temasek-backed companies are already active in the GCC, providing a platform for the group’s planned expansion.

    These include Singapore-headquartered engineering and consultancy firm Surbana Jurong, which has been involved in masterplanning and advisory work on major regional developments, alongside other portfolio companies with interests spanning infrastructure, logistics, financial services and technology.

    According to data from regional project tracker MEED Projects, Surbana Jurong is involved in several major projects in Saudi Arabia, including King Abdulaziz International airport (KAIA) in Jeddah, Jeddah Islamic Port, Red Sea Global’s Amaala masterplan, the Trojena dams scheme, Oxagon, King Salman International airport and Saudi Arabia Railway’s North-South Phosphate Railway 3.

    The firm has also worked on projects in the wider region, including the West Link project, Urban Loop, Musaffah Innovation District masterplan, Etihad Rail’s high-speed rail programme and Abu Dhabi airport’s Midfield Terminal.

    Surbana Jurong has also secured masterplanning contracts from Abu Dhabi’s Department of Municipalities & Transport and Abu Dhabi Ports.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20157511/main.jpg
    Yasir Iqbal